Ms. Brooke Besson is selling her unincorporated business during 2020. Included in the assets of this business are accounts receivable with a face value of $68,500. She and the purchaser of her business have reached an agreement that the net realizable value of these receivables is $65,300. In 2019, Ms. Besson deducted a reserve for doubtful debts of $4,200. Determine the tax effect of selling these receivables for Ms. Besson, assuming that:
• she and the purchaser do not elect under ITA 22; and
• she and the purchaser jointly elect under ITA 22.

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The Answer of Ms. Brooke Besson is selling her unincorporated business during 2020. Included in the assets of this business are accounts receivable with a face value of $68,500. She and the purchaser of her business have reached an agreement that the net realizable value of these receivables is $65,300. In 2019, Ms. Besson deducted a reserve for doubtful debts of $4,200. Determine the tax effect of selling these receivables for Ms. Besson, assuming that:
• she and the purchaser do not elect under ITA 22; and
• she and the purchaser jointly elect under ITA 22.

Ms Brooke Besson Is Selling Her Unincorporated Business During 2020